Why a High CTR is not Always Profitable

We are taught that a high click-through rate (CTR) is good because it will reduce the cost per click (CPC) and improve your ads position. But do you know that having a high CTR is not always desirable or profitable? What is more important is conversion rate. Read on and you will know why.

The CTR tells us how many people who search for your keywords click on your adverts. However it does not tell us the intention of these people. Are they serious buyers or just looking for information with no intention to buy at all?

If you have a lot of clicks on your adverts, but it is not converting to sales, then you are getting people who are not serious buyers. That is a waste of money because every click costs you money. A high CTR may have a low conversion rate. You rather want to have less but serious buyers.

"Buy"

What you can do is to add the word ‘Buy’ in your advert so the readers know they have to buy to get the information. If they don’t intent to buy, they will not click (and waste your money).

Of course you willget a lower CTR because those who are looking for free information will not click on your advert. And there are more people who want free information than those who want to buy.

Although the CTR is lower, the conversion rate is higher. You get less clicks, so the cost of your advert is less.

"Negative"

There are words that generate many impressions but never get a click. It will cost you money because it lower your CTR. There are also words that generate clicks but don’t make a sales. It will waste your money because it does not convert to a sale.

Once you have identified these words, add them to your negatives.

Negatives are keywords that are added at the ad group or campaign level to prevent impressions for search queries containing the negative keyword term.

Adding the right negatives will increase your conversation rate and reduce your CTR. One example of a negative is the word ‘free’.

You use negatives to filter out unprofitable traffic that are unrelated to your offer. You usually use it in broad search and phrase search, not in exact search.

In conclusion, my point is that conversion rate is more important than getting a higher CTR. I hope you agree with me.

1 Comment

Kalyn on January 8, 2017 at 10:35 am

Hi Zach! Kudos to your post! I totally agree with point #1. Letting customers know that yo1#u82&7;re there anytime is very important. And getting their feedback about your service helps you improve.